LOS ANGELES -- Despite record production of 7,535 Model S electric vehicles, Tesla Motors Inc. said today it posted a $49.8 million net loss in the first quarter while revenue rose to $620 million.

The automaker posted net income of $11.3 million, or 10 cents a share, on revenue of $555 million during the same quarter last year.

The company sold 6,457 vehicles during the first quarter of 2014. Tesla reported a gross profit of $155 million, but a $44 million operating loss when accounting for r&d and sales and administrative expenses.

“We are sold out of Q2 production,” Tesla CEO Elon Musk said in a call with analysts. “In some cases sales means demand, but in our case sales means deliveries.”

Tesla prefers to use nontraditional accounting methods outside the typically generally accepted accounting principles. By Tesla’s own measurement, the automaker posted a $17 million profit on $713 million in revenues. On that basis, it gained 12 cents a share, which was better than the 7 cents analysts had expected, Bloomberg reported.

Non-GAAP financials exclude stock-based compensation and noncash interest expense, and add back the deferred revenue and related costs for cars sold with a resale value guarantee. Tesla’s only GAAP-based profit came in the first quarter of 2013.

During the fourth quarter of 2013, Tesla reported a $16 million net loss, on $615 million in revenue.

Tesla is showing stronger gross margins because of improvements to its cost structure, said Tesla CFO Deepak Ahuja.

But Musk quickly added, “We don’t do any cost-down if it makes the product worse. It drives me crazy when other car companies reduce costs by reducing value. In some cases we’ve added cost to the car because something needed to be improved.”

In its earnings release, Tesla said it expects to deliver 7,500 units next quarter, and deliver 35,000 Model S sedans this year. Battery cell supply currently is crimping production, a situation the automaker hopes will be resolved by the third quarter.

Another worry to positive earnings for the second quarter: Tesla forecast r&d expenses will increase by 30 percent, while selling, general and administrative expenses will increase by 15 percent. Based on the first quarter results, that increase will account for another $40 million in expenses over current levels.

The reason for increased r&d expenses include Model S modifications for right-hand-drive markets, modifying rear door ingress/egress, various software improvements and improving seat comfort. Items like making the Model X’s falcon wing doors crashworthy continue to be an expensive investment.

Thanks to an issuance of $2 billion in convertible notes, Tesla’s cash position soared to $2.6 billion. The company plans capital investments between $650 million and $850 million for the year through increasing production capacity, growth in the retail store and supercharger outlets, development of the Model X crossover and the start of construction of its "gigafactory" battery production operations.

Musk said the automaker has “signed a letter of intent with Panasonic” to partner in building two lithium ion battery gigafactories.

Although he said groundbreaking for the first factory will happen next month, with the second factory beginning the month after that, he did not say where the plants would be. Initially, California’s lengthy regulatory process for greenfield sites had ruled it out of the selection process; however, Musk said the state is looking to streamline the process to lure one of the two gigafactories, Musk said.

Suppliers of some of the raw materials for the battery packs -- such as nickel, cobalt and lithium -- have yet to be selected, Musk said.

Getting the gigafactories built before the smaller, cheaper Gen 3 vehicles arrive is crucial. Tesla expects vehicle production to increase to 500,000 units annually at that time, currently aimed at 2018.

“What we couldn’t afford was a year or more for permits to proceed,” Musk said. “If we don’t have the gigafactories online when [Gen 3] vehicle capacity comes online, we will be in big trouble.”

Musk said that the launch of the Model X, which in the last investors’ report was slated for early 2015, might not begin serial production until well into the second quarter of 2015.

“Our focus is heavily on the X and making sure it’s a phenomenal product,” Musk said. Because the Model X will have a much steeper production ramp-up than the Model S, “We really need to make sure we are properly validated,” before serial production begins.

Tesla also is altering its model of placing superchargers only between major cities, Musk said. The automaker now is installing the units inside congested cities such as Shanghai, Beijing, London and San Francisco, where customers might have problems with securing a fixed parking space.